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Peri-urban councils warn Gippsland housing crisis threatens productivity and federal economic ambitions

Peri Urban Councils Victoria warns soaring prices and falling approvals are hurting productivity, urging federal and state governments to fund infrastructure reforms to unlock peri-urban housing supply and ease affordability pressures.

By news@gippsland - 23rd February 2026 - Back to News

Peri Urban Councils Victoria (PUCV) has warned that rocketing housing prices and falling building approvals are creating a drag on productivity - undermining the Federal Government's ambition to "lift the speed limit" of the Australian economy. As part of the alliance's 2026-27 Pre-Budget Submission, PUCV has outlined urgent reforms and targeted funding needed to unlock housing supply in Victoria's peri-urban growth areas - communities that remain comparatively affordable but are rapidly losing that advantage.

In Peri Urban Councils Victoria's 2026–27 Pre-Budget Submission, PUCV urges urgent funding reforms as prices near $1 million and approvals slump nationwide

In Peri Urban Councils Victoria's 2026–27 Pre-Budget Submission, PUCV urges urgent funding reforms as prices near $1 million and approvals slump nationwide

Housing crisis escalates

The call from PUCV comes as key data released showed the median house price in Melbourne was just under $1 million and building approvals across the country fell by almost 15% or to just over 13,000 homes, falling well short of the 20,000 minimum monthly target of home to meet the National Housing Accord.

PUCV Chair, Cr Moira Berry said these figures were concerning when coupled with recent rate rises that were undoubtedly going to make the cost of housing for Victorian's even further out of reach. "Of course, if housing prices, along with so many other cost of living factors, are soaring, so too is the pressure people search for more income to support the family budget."

"If Treasurer Chalmers is serious about lifting productivity, there are clear steps that can be taken to remove the bottlenecks in housing supply. Peri Urban Councils have long been advocating for reforms to get housing ready land on the market yet despite the almost universally agreed use of the term 'crisis' we are seeing funding inertia from our state and federal leaders," Cr Berry said.

Unlock housing supply

In the 2026-27 Pre Budget Submission PUCV is calling for:

  • Housing Enabling Loan facility to allow councils to borrow against future developer contributions that can deliver critical infrastructure when it is needed - not years later
  • Top up of both State and Federal liveability infrastructure funds to support essential liveability and community infrastructure outside DCP scope

"People want to live in our communities and there is extraordinary demand for house and land packages because they sit well below the $800K and beyond price tag you will find in Melbourne. .Yet the front-end cost to our member councils of meeting this demand and getting land ready for housing is really out of reach for smaller local governments," Cr Berry said.

Immediate action required

Cr Berry added, "We have a smaller rate basis, limited borrowing capacity and are hamstrung by out-of-date Development Contribution Plans that leave councils with significant funding gaps that limit our ability to pay for basic services."

"Crissis are not solved without action and intervention and if our State and Federal leaders continue to dismiss real time solutions to meet a fundamental need such as housing, then there is only one way housing prices are going and that is up," Cr Berry concluded.

Pictures from Peri Urban Councils Victoria website.


Source: http://gippsland.com/

Published by: news@gippsland.com



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